Exhibit 10.2
INFORMATION RESOURCES, INC.
AMENDED AND RESTATED SECURITY AGREEMENT
This Amended and Restated Security Agreement (the "Agreement") is dated as
of October 16, 2001, between Information Resources, Inc. a Delaware corporation,
with its mailing address at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking corporation
("▇▇▇▇▇▇ Bank"), with its mailing address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ acting as agent hereunder for the Lenders hereinafter identified
and defined (said ▇▇▇▇▇▇ Bank acting as such agent and any successor or
successors to said ▇▇▇▇▇▇ Bank acting in such capacity being hereinafter
referred to as the "Agent");
PRELIMINARY STATEMENT:
A. The Company, ▇▇▇▇▇▇ Bank individually and as agent, certain other
financial institutions have entered into a Credit Agreement dated as October 31,
1997, as amended and currently in effect (such Credit Agreement, as so amended,
as the same may be further amended, modified or restated from time to time being
hereinafter referred to as the "Credit Agreement"), pursuant to which such
lenders (those lenders which are now or which from time to time hereafter become
party to the Credit Agreement being hereinafter referred to collectively as the
"Lenders" and individually as a "Lender") have agreed, subject to certain terms
and conditions, to extend a revolving credit facility to the Company;
B. The Company may from time to time enter into one or more interest
rate exchange, cap, collar, floor or other agreements with one or more of the
Lenders party to the Credit Agreement or their affiliates for the purpose of
hedging or otherwise protecting the Company against changes in interest rates on
the Notes (the liability of the Company in respect of such agreements with such
Lenders or their affiliates being hereinafter referred to as the "Hedging
Liability"); and
C. Indebtedness, obligations, and liabilities of the Company under the
Credit Agreement, and the related notes and collateral documents, together with
the Hedging Liability, are currently secured by that certain Security Agreement
dated as of October 18, 2000, between the Company and ▇▇▇▇▇▇ Bank, and the
personal property of the Company described therein (the "Prior Security
Agreement").
D. Effective July 1, 2001, certain states and other jurisdictions
adopted revisions to Article 9 of the Uniform Commercial Code (the "Revised
UCC"). The Revised UCC, among other things, expands the scope of personal
property and transactions covered by such law.
E. The Company and the Agent, on behalf of the Lenders, agree to
supplement the Security Agreement by including as part of the Collateral certain
additional personal property and transactions now covered by the Revised UCC and
conforming certain terms used herein to those used in the Revised UCC, all as
described herein.
F. As a condition to extending credit or otherwise making financial
accommodations available to or for the account of the Company (whether under the
Credit Agreement or otherwise), the Lenders require, among other things, that
the Company grant the Agent, on behalf of the Lenders, a security interest in
the Company's personal property described herein subject to the terms and
conditions hereof and, in connection therewith, that the Prior Security
Agreement be amended and restated in its entirety to read as set forth in this
Agreement (this Agreement and the various other instruments and documents
entered into in connection herewith being hereinafter referred to as the
"Collateral Documents").
NOW, THEREFORE, for and in consideration of the execution and delivery by
the Lenders of the Third Amendment to Credit Agreement dated as of even date
herewith, and other good and valuable consideration, receipt whereof is hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Grant of Security Interest in the Collateral; Obligations
Secured.
(a) The Company hereby grants to the Agent for the benefit of the
Lenders (and, in the case of Hedging Liability, their affiliates) a security
interest in and right of set-off against, and acknowledges and agrees that the
Agent has and shall continue to have for the benefit of the Lenders (and, in the
case of Hedging Liability, their affiliates) a continuing security interest in
and right of set-off against, any and all right, title and interest, whether now
owned or existing or hereafter created, acquired or arising, in and to all
personal property of the Company including all of the following:
(i) Accounts (including Health-Care-Insurance Receivables, if
any);
(ii) Chattel Paper;
(iii) Instruments (including Promissory Notes);
(iv) Documents;
(v) General Intangibles (including Payment Intangibles and
Software);
(vi) Letter-of-Credit Rights;
(vii) Supporting Obligations;
(viii) Deposit Accounts;
(ix) Investment Property (including certificated and
uncertificated Securities, Securities Accounts, Security Entitlements,
Commodity Accounts, and Commodity Contracts);
(x) Inventory;
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(xi) Equipment (including all software, whether or not the same
constitutes embedded software, used in the operation thereof);
(xii) Fixtures;
(xiii) All rights to merchandise and other Goods (including rights to
returned or repossessed Goods and rights of stoppage in transit) which is
represented by, arises from, or relates to any of the foregoing;
(xiv) All personal property and interests in personal property of
the Company of any kind or description now held by the Lenders or at any
time hereafter transferred or delivered to, or coming into the possession,
custody or control of, the Lenders, or any agent or affiliate of the
Lenders, whether expressly as collateral security or for any other purpose
(whether for safekeeping, custody, collection or otherwise), and all
dividends and distributions on or other rights in connection with any such
property;
(xv) All supporting evidence and documents relating to any of the
above-described property, including, without limitation, computer
programs, disks, tapes and related electronic data processing media, and
all rights of the Company to retrieve the same from third parties, written
applications, credit information, account cards, payment records,
correspondence, delivery and installation certificates, invoice copies,
delivery receipts, notes and other evidences of indebtedness, insurance
certificates and the like, together with all books of account, ledgers and
cabinets in which the same are reflected or maintained;
(xvi) All Accessions and additions to, and substitutions and
replacements of, any and all of the foregoing; and
(xvii) All Proceeds and products of the foregoing, and all
insurance of the foregoing and proceeds thereof;
all of the foregoing being herein sometimes referred to as the "Collateral". All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of Illinois as in effect from time to time ("UCC")
shall have the same meanings herein as such terms are defined in the UCC, unless
this Agreement shall otherwise specifically provide. For purposes of this
Agreement, the term "Receivables" means all rights to the payment of a monetary
obligation, whether or not earned by performance, and whether evidenced by an
Account, Chattel Paper, Instrument, General Intangible, or otherwise.
(b) This Agreement is made and given to secure, and shall secure, the
payment and performance of (i) any and all indebtedness, obligations and
liabilities of the Company under or in connection with or evidenced by (w) the
Credit Agreement or (x) the Notes of the Company heretofore or hereafter issued
under the Credit Agreement and the obligations of the Company to reimburse the
Agent for the amount of all drawings on all Letters of Credit issued for the
account of the Company pursuant to the Credit Agreement, and all other
obligations of the Company under any and all Applications for such Letters of
Credit or (y) any of the Collateral Documents
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or (z) agreements with any one or more of the Lenders or their affiliates with
respect to Hedging Liability, in each case whether now existing or hereafter
arising (and whether arising before or after the filing of a petition in
bankruptcy), due or to become due, direct or indirect, absolute or contingent,
and howsoever evidenced, held or acquired and (ii) any and all expenses and
charges, legal or otherwise, suffered or incurred by the Agent and the Lenders
in collecting or enforcing any of such indebtedness, obligations and liabilities
or in realizing on or protecting or preserving any security therefor, including,
without limitation, the lien and security interest granted hereby (all of the
indebtedness, obligations, liabilities, expenses and charges described in
clauses (i) and (ii) above being hereinafter referred to as the "Obligations").
Section 2. Terms Defined in Credit Agreement. All capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement.
Section 3. Covenants, Agreements, Representations and Warranties. The
Company hereby covenants and agrees with, and represents and warrants to, the
Agent and the Lenders that:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company
shall not change its state of organization without the Agent's prior
written consent. The Company is the sole and lawful owner of the
Collateral and has full right, power and authority to enter into this
Agreement and to perform each and all of the matters and things herein
provided for; and the execution and delivery of this Agreement, and the
observance and performance of any of the matters and things herein set
forth, will not contravene or constitute a default under any provision of
law or any judgment, injunction, order or decree binding upon the Company
or any provision of the Company's charter, articles of incorporation or
by-laws or of any covenant, indenture or agreement of or affecting the
Company or any of its properties, or result in the creation or imposition
of any lien or encumbrance on any property of the Company. The Company's
organizational registration number is DE-0938231.
(b) The Collateral is and will remain in the Company's possession
or control at the locations listed under Item 1 on Schedule A attached
hereto (collectively, the "Permitted Collateral Locations"), except for
Collateral which in the ordinary course of the Company's business is in
transit between the Permitted Collateral Locations. If for any reason
Collateral is at any time kept or located at locations other than the
Permitted Collateral Locations, the Agent shall nevertheless have and
retain a security interest therein. The Company owns and will at all times
own all Permitted Collateral Locations, except to the extent otherwise
indicated on Schedule A. The Company's chief executive office and
principal place of business is at, and the Company keeps and shall keep
all of its books and records relating to Receivables only at, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company has no other
executive offices or places of business other than those listed under Item
2 on Schedule A. The Company will not maintain an executive office or
place of business at a location other than those specified pursuant to the
immediately preceding sentence without first providing the Agent 30 days'
prior
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written notice of the Company's intent to do so; provided, however, that
the Company will at all times maintain its chief executive office in the
contiguous continental United States of America.
(c) The Collateral and every part thereof is and will be free and
clear of all security interests, liens (including, without limitation,
mechanics', laborers' and statutory liens), attachments, levies and
encumbrances of every kind, nature and description and whether voluntary
or involuntary, except for the security interest of the Agent therein and
as otherwise permitted by Section 7.11 of the Credit Agreement. The
Company will warrant and defend the Collateral against any claims and
demands of all persons or entities at any time claiming the same or any
interest in the Collateral adverse to the Agent or any Lender.
(d) The Company will promptly pay when due all taxes, assessments
and governmental charges and levies upon or against the Company or the
Collateral, in each case before the same become delinquent and before
penalties accrue thereon, unless and to the extent that the same are being
contested in good faith by appropriate proceedings which prevent
foreclosure on or other realization upon any Collateral and preclude
interference with the operation of the Company's business in the ordinary
course and the Company shall have established adequate reserves therefor.
(e) The Company will not waste or destroy the Collateral or any
part thereof and will not be negligent in the care or use of any
Collateral. The Company will not use, manufacture, sell or distribute any
Collateral in violation of any statute, ordinance or other governmental
requirement. The Company will perform in all material respects its
obligations under any contract or other agreement constituting part of the
Collateral, it being understood and agreed that the Agent and the Lenders
have no responsibility to perform such obligations.
(f) Subject to Sections 4(b), 5(a), 6(b) and 6(c) hereof, the
Company will not, without the Agent's prior written consent, sell, assign,
mortgage, lease or otherwise dispose of the Collateral or any interest
therein.
(g) The Company will insure the Collateral which is insurable
against such risks and hazards as other companies similarly situated
insure against, and including in any event loss or damage by fire, theft,
burglary, pilferage, loss in transit and such other hazards as the Agent
may reasonably specify, in amounts and under policies containing loss
payable clauses to the Agent as its interest may appear (and, if the Agent
requests, naming the Agent and the Lenders as additional insureds therein)
by insurers reasonably acceptable to the Agent. All premiums on such
insurance shall be paid by the Company and the policies of such insurance
(or certificates therefor) delivered to the Agent. All insurance required
hereby shall provide that any loss shall be payable notwithstanding any
act or negligence of the Company, shall provide that no cancellation
thereof shall be effective until at least thirty (30) days after receipt
by the Company and the Agent of written notice thereof, and shall be
satisfactory to the Agent in all other respects. In case of any material
loss, damage to or destruction of the Collateral or any part thereof, the
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Company shall promptly give written notice thereof to the Agent and the
Lenders generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of the
Collateral or any part thereof, the Company, whether or not the insurance
proceeds, if any, received on account of such damage or destruction shall
be sufficient for that purpose, at the Company's cost and expense, will
promptly repair or replace the Collateral so lost, damaged or destroyed,
except to the extent (i) such Collateral, prior to its loss, damage or
destruction, had become uneconomical, obsolete or worn out or (ii) such
Collateral is not necessary for or of importance to the proper conduct of
the Company's business in the ordinary course and such Collateral and all
other Collateral lost, damaged or destroyed during the immediately
preceding 12 calendar months had an aggregate fair market value, prior to
its loss, damage or destruction, of less than $1,000,000. In the event the
Company shall receive any proceeds of such insurance, the Company will
immediately pay over such proceeds to the Agent. The Company hereby
authorizes the Agent, at the Agent's option, to adjust, compromise and
settle any losses under any insurance afforded at any time after the
occurrence and during the continuation of any Default or Event of Default,
and the Company does hereby irrevocably constitute the Agent, its
officers, agents and attorneys, as the Company's attorneys-in-fact, with
full power and authority to effect such adjustment, compromise and/or
settlement and to endorse any drafts drawn by an insurer of the Collateral
or any part thereof and to do everything necessary to carry out such
purposes and to receive and receipt for any unearned premiums due under
policies of such insurance. Unless the Agent elects to adjust, compromise
or settle losses as aforesaid, any adjustment, compromise and/or
settlement of any losses under any insurance shall be made by the Company
subject to final approval of the Agent in the case of losses exceeding
$1,000,000. Net insurance proceeds received by the Agent under the
provisions hereof or under any policy or policies of insurance covering
the Collateral or any part thereof shall be applied to the reduction of
the Obligations (whether or not then due); provided, however, that the
Agent agrees to release such insurance proceeds to the Company for
replacement or restoration of the portion of the Collateral lost, damaged
or destroyed required by this Agreement to be so replaced or restored if,
but only if, (i) at the time of release no Default or Event of Default
exists hereunder, (ii) written application for such release is received
from the Company within 30 days of receipt of such proceeds and (iii) the
Agent has received evidence reasonably satisfactory to it that the
Collateral lost, damaged or destroyed has been or will be replaced or
restored to its condition immediately prior to the loss, destruction or
other event giving rise to the payment of such insurance proceeds. All
insurance proceeds shall be subject to the lien and security interest of
the Agent hereunder.
UNLESS THE COMPANY PROVIDES THE AGENT WITH EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT
THE COMPANY'S EXPENSE TO PROTECT THE AGENT'S INTERESTS IN THE COLLATERAL.
THIS INSURANCE MAY, BUT NEED NOT, PROTECT THE COMPANY'S INTERESTS IN THE
COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS
THAT THE COMPANY MAKES OR ANY CLAIM THAT IS MADE AGAINST THE COMPANY IN
CONNECTION WITH THE COLLATERAL. THE COMPANY MAY LATER CANCEL ANY SUCH
INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER
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PROVIDING THE AGENT WITH EVIDENCE THAT THE COMPANY HAS OBTAINED INSURANCE
AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE
COLLATERAL, THE COMPANY WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY
IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS SECURED HEREBY. THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE COMPANY
MAY BE ABLE TO OBTAIN ON ITS OWN.
(h) The Company will at all times allow the Agent, any Lender and
their respective representatives free access to and right of inspection of
the Collateral, provided that prior to the occurrence of any Default or
Event of Default hereunder any such access or inspection shall only be
required during the Company's normal business hours.
(i) If any Collateral is in the possession or control of any of
the Company's agents or processors and the Agent so requests, the Company
agrees to notify such agents or processors in writing of the Agent's
security interest therein and instruct them to hold all such Collateral
for the Agent's account and subject to the Agent's instructions. The
Company will, upon request of the Agent, authorize and instruct all
bailees and any other parties, if any, at any time processing, labeling,
packaging, holding, storing, shipping or transferring all or any part of
the Collateral to permit the Agent, any Lender and their respective
representatives to examine and inspect any of the Collateral then in such
party's possession and to verify from such party's own books and records
any information concerning the Collateral or any part thereof which the
Agent, any Lender or their respective representatives may seek to verify.
As to any premises not owned by the Company wherein any of the Collateral
is located, if any, the Company shall, unless the Agent requests
otherwise, cause each party having any right, title or interest in, or
lien on, any of such premises to enter into an agreement (any such
agreement to contain a legal description of such premises) whereby such
party disclaims any right, title and interest in, and lien on, the
Collateral, allowing the removal of such Collateral by the Agent or by the
Lenders and otherwise in form and substance acceptable to the Agent;
provided, however, that no such agreement need be obtained with respect to
any one location wherein the value of the Collateral as to which such
agreement has not been obtained aggregates less than $1,000,000 and the
value of all Collateral as to which such agreements have not been obtained
aggregates less than $2,000,000.
(j) The Company agrees from time to time to deliver to the Agent
and any Lender such evidence of the existence, identity and location of
the Collateral and of its availability as collateral security pursuant
hereto (including, without limitation, schedules describing all
Receivables created or acquired by the Company, copies of customer
invoices or the equivalent and original shipping or delivery receipts for
all merchandise and other goods sold or leased or services rendered,
together with the Company's warranty of the genuineness thereof, and
reports stating the book value of Inventory and Equipment by major
category and location), in each case as the Agent or such Lender may
reasonably request. The Agent shall have the right to verify all or any
part of the
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Collateral in any manner, and through any medium, which the Agent or the
Lenders consider appropriate, and the Company agrees to furnish all
assistance and information, and perform any acts, which the Agent may
reasonably require in connection therewith. The Company will promptly
notify the Agent and each Lender of any Collateral which the Company has
determined to have been rendered obsolete stating the prior book value of
such Collateral, its type and location.
(k) The Company will comply in all material respects with the
terms and conditions of any and all leases, easements, right-of-way
agreements and other agreements binding upon the Company or affecting the
Collateral, in each case which cover the premises wherein the Collateral
is located, and any orders, ordinances, laws or statutes of any city,
state or other governmental entity, department or agency having
jurisdiction with respect to such premises or the conduct of business
thereon.
(l) The Company has not invoiced Receivables or otherwise
transacted business, and does not invoice Receivables or otherwise
transact business, under any trade names other than the Company's name set
forth in the introductory paragraph of this Agreement. The Company will
not change its name or transact business under any other trade name, in
each case without first giving the Agent 30 days' prior written notice of
its intent to do so.
(m) The Company agrees to execute and deliver to the Agent such
further agreements and assignments or other instruments and documents and
to do all such other things as the Agent may reasonably deem necessary or
appropriate to assure the Agent its security interest hereunder, including
(i) such financing statement or statements or amendments thereof or
supplements thereto or other instruments and documents as the Agent may
from time to time reasonably require in order to comply with the Uniform
Commercial Code as enacted in the State of Illinois and any successor
statute(s) thereto (the "Code") and (ii) such control agreements with
respect to all Deposit Accounts, Securities Accounts, Letter-of-Credit
Rights, and electronic Chattel Paper, and to use commercially reasonable
efforts to cause the relevant depository institutions, financial
intermediaries, and letter of credit issuers to execute and deliver such
control agreements, as the Lenders may from time to time require. The
Company hereby agrees that a carbon, photographic or other reproduction of
this Agreement or any such financing statement is sufficient for filing as
a financing statement by the Agent without notice thereof to the Company
wherever the Agent in its sole discretion desires to file the same. The
Company hereby authorizes the Lenders to file any and all financing
statements covering the Collateral or any part thereof as the Lenders may
require, including financing statements describing the Collateral as "all
assets" or "all personal property" or words of like meaning. The Lenders
may order lien searches from time to time against the Company and the
Collateral, and the Company shall promptly reimburse the Lenders for all
reasonable costs and expenses incurred in connection with such lien
searches. In the event for any reason the law of any jurisdiction other
than Illinois becomes or is applicable to the Collateral or any part
thereof, or to any of the Obligations, the Company agrees to execute and
deliver all such instruments and documents and to do all such other things
as the Agent in its sole discretion deems necessary or appropriate to
preserve, protect and
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enforce the security interest of the Agent under the law of such other
jurisdiction. The Company agrees to ▇▇▇▇ its books and records to reflect
the security interest of the Agent in the Collateral.
(n) On failure of the Company to perform any of the covenants and
agreements herein contained, the Agent may at its option perform the same
and in so doing may expend such sums as the Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, liens and
encumbrances, expenditures made in defending against any adverse claims,
and all other expenditures which the Agent may be compelled to make by
operation of law or which the Agent may make by agreement or otherwise for
the protection of the security hereof. All such sums and amounts so
expended shall be repayable by the Company immediately without notice or
demand, shall constitute additional Obligations secured hereunder and
shall bear interest from the date said amounts are expended at the rate
per annum (computed on the basis of a 360-day year for the actual number
of days elapsed) determined by adding 2% to the Domestic Rate as from time
to time in effect with any change in such rate per annum as so determined
by reason of a change in such Domestic Rate to be effective on the date of
such change in said Domestic Rate (such rate per annum as so determined
being hereinafter referred to as the "Default Rate"). No such performance
of any covenant or agreement by the Agent on behalf of the Company, and no
such advancement or expenditure therefor, shall relieve the Company of any
default under the terms of this Agreement or in any way obligate the Agent
or any Lender to take any further or future action with respect thereto.
The Agent in making any payment hereby authorized may do so according to
any ▇▇▇▇, statement or estimate procured from the appropriate public
office or holder of the claim to be discharged without inquiry into the
accuracy of such ▇▇▇▇, statement or estimate or into the validity of any
tax assessment, sale, forfeiture, tax lien or title or claim. The Agent in
performing any act hereunder shall be the sole judge of whether the
Company is required to perform the same under the terms of this Agreement.
The Agent is hereby authorized to charge any depository or other account
of the Company maintained with the Agent for the amount of such sums and
amounts so expended.
Section 4. Special Provisions Re: Receivables.
(a) As of the time any Receivable becomes subject to the security
interest provided for hereby and at all times thereafter, the Company shall be
deemed to have warranted as to each and all of such Receivables that all
warranties of the Company set forth in this Agreement are true and correct with
respect to each such Receivable; that each Receivable and all papers and
documents relating thereto are genuine and in all respects what they purport to
be; that each Receivable is valid and subsisting and, if such Receivable is an
Account, arises out of a bona fide sale of goods sold and delivered by the
Company to, or in the process of being delivered to, or out of and for services
theretofore actually rendered by the Company to, the account debtor named
therein; that no such Receivable is evidenced by any Instrument or Chattel Paper
unless such instrument or chattel paper has theretofore been endorsed by the
Company and delivered to the Agent (except to the extent the Agent specifically
requests the Company not to do so with
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respect to any such Instrument or Chattel Paper); that no surety bond was
required or given in connection with such Receivable or the contracts or
purchase orders out of which the same arose; and that if said Receivable is
scheduled, listed or referred to on any certificate evidencing the Borrowing
Base or is otherwise a Receivable which the Company wants the Lenders to
consider as an Eligible Account, that said Receivable qualifies as an Eligible
Account. Without limiting the foregoing, if any Receivable which the Company
desires to qualify as an Eligible Account arises out of a contract with the
United States of America or any of its departments, agencies or
instrumentalities, the Company agrees to notify the Agent and execute whatever
instruments and documents are required by the Agent in order that such
Receivable shall be assigned to the Agent and that proper notice of such
assignment shall be given under the federal Assignment of Claims Act (or any
successor statute).
(b) Unless and until an Event of Default hereunder occurs, any
merchandise or other goods which are returned by a customer or account debtor or
otherwise recovered may be resold by the Company in the ordinary course of its
business as presently conducted in accordance with Section 6(b) hereof; upon the
occurrence and during the continuation of any Event of Default hereunder, such
merchandise and other goods shall be set aside at the request of the Agent and
held by the Company as trustee for the Agent and the Lenders and shall remain
part of the Collateral. Unless and until an Event of Default hereunder occurs,
the Company may settle and adjust disputes and claims with its customers and
account debtors, handle returns and recoveries and grant discounts, credits and
allowances in the ordinary course of its business as presently conducted for
amounts and on terms which the Company in good faith considers advisable. Upon
the occurrence and during the continuation of any Event of Default hereunder,
unless the Agent requests otherwise, the Company shall notify the Agent promptly
of all returns and recoveries and, on the Agent's request, deliver any such
merchandise or other goods to the Agent. Upon the occurrence and during the
continuation of any Event of Default hereunder, unless the Agent requests
otherwise, the Company shall also notify the Agent promptly of all disputes and
claims and settle or adjust them at no expense to the Agent or the Lenders
hereunder, but no discount, credit or allowance other than on normal trade terms
in the ordinary course of business as presently conducted shall be granted to
any customer or account debtor and no returns of merchandise or other goods
shall be accepted by the Company without the Agent's consent. The Agent may, at
all times upon the occurrence and during the continuation of any Event of
Default hereunder, settle or adjust disputes and claims directly with customers
or account debtors for amounts and upon terms which the Agent considers
advisable.
(c) Unless delivered to the Lenders or its Agent, all tangible
Chattel Paper and Instruments shall contain a legend acceptable to the Lenders
indicating that such Chattel Paper or Instrument is subject to the security
interest of the Lenders contemplated by this Agreement
Section 5. Collection of Receivables.
(a) Except as otherwise provided in this Agreement, the Company shall
make collection of all Receivables and may use the same to carry on its business
in accordance with sound business practice and otherwise subject to the terms
hereof.
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(b) Whether or not any Default or Event of Default has occurred
hereunder and whether or not the Agent has exercised any or all of its rights
under other provisions of this Section 5, in the event the Agent requests the
Company to do so:
(i) all Instruments and Chattel Paper at any time constituting
part of the Receivables (including any postdated checks) shall, upon
receipt by the Company, be immediately endorsed to and deposited with
Agent; and/or
(ii) the Company shall instruct all customers and account debtors
to remit all payments in respect of Receivables to a lockbox or lockboxes
under the sole custody and control of Agent and which are maintained at
post offices selected by the Agent.
(c) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all of
its rights under other provisions of this Section 5, the Agent or its designee
may notify the Company's customers and account debtors at any time that
Receivables have been assigned to the Agent or of the Agent's security interest
therein, and either in its own name, or the Company's name, or both, demand,
collect (including, without limitation, through a lockbox analogous to that
described in Section 5(b)(ii) hereof), receive, receipt for, ▇▇▇ for, compound
and give acquittance for any or all amounts due or to become due on Receivables,
and in the Agent's discretion file any claim or take any other action or
proceeding which the Agent may deem reasonably necessary or appropriate to
protect and realize upon the security interest of the Agent in the Receivables.
(d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of Sections
5(b) or 5(c) hereof may be handled and administered by the Agent in and through
a remittance account or accounts maintained at the Agent or by the Agent at a
commercial bank or banks selected by the Agent (each a "Depositary Bank"), and
the Company acknowledges that the maintenance of such remittance accounts by the
Agent is solely for the Agent's convenience and that the Company does not have
any right, title or interest in such remittance accounts or any amounts at any
time standing to the credit thereof. The Agent may apply all or any part of any
proceeds of Receivables or other Collateral received by it from any source to
the payment of the Obligations (whether or not then due and payable), such
applications to be made in such amounts, in such manner and order and at such
intervals as the Agent may from time to time in its discretion determine, but
not less often than once each week. The Agent need not apply or give credit for
any item included in proceeds of Receivables or other Collateral until the
relevant Depositary Bank has received final payment therefor at its office in
cash or final solvent credits current at the site of deposit acceptable to the
Agent and the relevant Depositary Bank as such. However, if the Agent does
permit credit to be given for any item prior to a Depositary Bank receiving
final payment therefor and such Depositary Bank fails to receive such final
payment or an item is charged back to the Agent or any Depositary Bank for any
reason, the Agent may at its election in either instance charge the amount of
such item back against any such remittance accounts or any depository account of
the Company maintained with the Agent, together with interest thereon at the
Default Rate. Concurrently with each transmission of any proceeds of Receivables
or other Collateral to any remittance account, the Company shall furnish the
Agent with a report in such form as Agent shall reasonably require identifying
the particular Receivable or such other Collateral from which the same arises or
-11-
relates. Unless and until a Default or an Event of Default shall have occurred
and be continuing hereunder, the Agent will cause proceeds of Collateral which
the Agent has not applied to the Obligations as provided above to be released
from the remittance accounts from time to time or otherwise make such proceeds
available to the Company at its request, but not less often than once per week.
The Company hereby indemnifies the Agent and the Lenders from and against all
liabilities, damages, losses, actions, claims, judgments, costs, expenses,
charges and attorneys' fees suffered or incurred by the Agent or any Lender
because of the maintenance of the foregoing arrangements; provided, however,
that the Company shall not be required to indemnify the Agent or any Lender for
any of the foregoing to the extent they arise solely from the gross negligence
or willful misconduct of the person seeking to be indemnified. The Agent and the
Lenders shall have no liability or responsibility to the Company for the Agent
or any other Depositary Bank accepting any check, draft or other order for
payment of money bearing the legend "payment in full" or words of similar import
or any other restrictive legend or endorsement whatsoever or be responsible for
determining the correctness of any remittance.
Section 6. Special Provisions Re: Inventory and Equipment.
(a) The Company will at its own cost and expense maintain, keep and
preserve the Inventory in good and merchantable condition and keep and preserve
the Equipment in good repair, working order and condition, ordinary wear and
tear excepted, and, without limiting the foregoing, make all necessary and
proper repairs, replacements and additions to the Equipment so that the
efficiency thereof shall be fully preserved and maintained.
(b) The Company may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume
and sell the Inventory in the ordinary course of its business, but a sale in the
ordinary course of business shall not under any circumstance include any
transfer or sale in satisfaction, partial or complete, of a debt owing by the
Company.
(c) The Company may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell (i)
obsolete, worn out or unusable Equipment which is concurrently replaced with
similar Equipment at least equal in quality and condition to that sold and owned
by the Company free of any lien, charge or encumbrance other than the security
interest granted hereby and (ii) Equipment which this Agreement would not
require the Company to repair or replace if the same were lost, damaged or
destroyed pursuant to Section 3(g) hereof.
(d) As of the time any Inventory or Equipment becomes subject to the
security interest provided for hereby and at all times thereafter, the Company
shall be deemed to have warranted as to any and all of such Inventory and
Equipment that all warranties of the Company set forth in this Agreement are
true and correct with respect to such Inventory and Equipment; that all of such
Inventory and Equipment is located at a location set forth pursuant to Section
3(b) hereof. The Company warrants and agrees that no Inventory is or will be
consigned to any other person or entity without the Agent's prior written
consent.
-12-
(e) Upon the Agent's request, the Company shall at its own cost and
expense cause the lien of the Agent in and to any portion of the Collateral
subject to a certificate of title law to be duly noted on such certificate of
title or to be otherwise filed in such manner as is prescribed by law in order
to perfect such lien and will cause all such certificates of title and evidences
of lien to be deposited with the Agent.
(f) Except for Equipment from time to time located on the real estate
described on Schedule B attached hereto and as otherwise disclosed to the
Lenders in writing, none of the Equipment is or will be attached to real estate
in such a manner that the same may become a fixture.
(g) If any of the Inventory is at any time evidenced by a document of
title, such document shall be promptly delivered by the Company to the Agent.
Section 7. Special Provisions Re: Investment Property and Deposits.
(a) Unless and until an Event of Default has occurred and is continuing
and thereafter until notified to the contrary by the Agent pursuant to Section
9(d) hereof:
(i) The Company shall be entitled to exercise all voting and/or
consensual powers pertaining to the Investment Property or any part
thereof, for all purposes not inconsistent with the terms of this
Agreement or any other document evidencing or otherwise relating to any
Obligations; and
(ii) The Company shall be entitled to receive and retain all cash
dividends paid upon or in respect of the Investment Property.
(b) All Investment Property of the Company (including all securities,
certificated or uncertificated, securities accounts, and commodity accounts)
maintained by the Company on the date hereof is listed and identified on
Schedule C attached hereto and made a part hereof. The Company shall promptly
notify the Agent of any other Investment Property acquired or maintained by the
Company after the date hereof, and shall submit to the Agent a supplement to
Schedule C to reflect such additional rights (provided the Company's failure to
do so shall not impair the Agent's security interest therein). Certificates for
all certificated securities now or at any time constituting Investment Property
shall, at the Agent's request, be promptly delivered by the Company to the Agent
duly endorsed in blank for transfer or accompanied by an appropriate assignment
or assignments or an appropriate undated stock power or powers, in every case
sufficient to transfer title thereto, including, without limitation, all stock
received in respect of a stock dividend or resulting from a split-up, revision,
or reclassification of the Investment Property or any part thereof or received
in addition to, in substitution of, or in exchange for the Investment Property
or any part thereof as a result of a merger, consolidation, or otherwise. With
respect to any uncertificated securities or any Investment Property held by a
securities intermediary, commodity intermediary, or other financial intermediary
of any kind, at the Agent's request, the Company shall execute and deliver, and
shall cause any such issuer or intermediary to execute and deliver, an agreement
among the Company, the Agent, and such issuer or intermediary in form and
substance reasonably satisfactory to the Agent which
-13-
provides, among other things, for the intermediary's agreement that it shall
comply with entitlement orders, and apply any value distributed on account of
any Investment Property maintained in an account with such intermediary, as
directed by the Agent without further consent by the Company. The Agent may at
any time, after the occurrence of an Event of Default or an event or condition
which with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, cause to be transferred into its name or the name of its
nominee or nominees all or any part of the Investment Property hereunder.
(c) Unless and until an Event of Default, or an event or condition which
with the lapse of time or the giving of notice, or both, would constitute an
Event of Default, has occurred and is continuing, the Company may sell or
otherwise dispose of any Investment Property, provided that sales or other
dispositions of capital stock or other equity interests of any direct or
indirect Subsidiary shall be in accordance with the terms of the Credit
Agreement. After the occurrence and during the continuation of any Event of
Default or of any event or condition which with the lapse of time or the giving
of notice, or both, would constitute an Event of Default, the Company shall not
sell all or any part of the Investment Property without the prior written
consent of the Agent.
(d) The Company represents that on the date of this Agreement, none of
the Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except to
the extent the Company has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock. If at any time the Investment Property or
any part thereof consists of margin stock, the Company shall promptly so notify
the Agent and deliver to the Agent a duly executed and completed Form U-1 and
such other instruments and documents reasonably requested by the Agent in form
and substance reasonably satisfactory to the Agent.
(e) Notwithstanding anything to the contrary contained herein, in the
event any Investment Property is subject to the terms of a separate security
agreement in favor of the Agent, the terms of such separate security agreement
shall govern and control unless otherwise agreed to in writing by the Agent.
(f) All Deposit Accounts maintained by the Company on the date hereof
are listed and identified (by account number and depository institution) on
Schedule C attached hereto and made a part hereof. The Company shall promptly
notify the Agent of any other Deposit Account opened or maintained by the
Company after the date hereof, and shall submit to the Agent a supplement to
Schedule C to reflect such additional accounts (provided the Company's failure
to do so shall not impair the Agent's security interest therein). With respect
to any Deposit Account maintained by a depository institution other than the
Agent, and as a condition to the establishment and maintenance of any such
Deposit Account the Company, the depository institution, and the Lender shall
execute and deliver an account control agreement in form and substance
satisfactory to the Lender which provides, among other things, for the
depository institution's agreement that it will comply with instructions
originated by the Agent directing the disposition of the funds in the Deposit
Account without further consent by such Company.
-14-
Section 8. Power of Attorney. In addition to any other powers of attorney
contained herein, the Company hereby appoints the Agent, its nominee, or any
other person whom the Agent may designate as the Company's attorney-in-fact,
with full power upon the occurrence and during the continuation of an Event of
Default hereunder to sign the Company's name on verifications of accounts, to
send requests for verification of Receivables to the Company's customers and
account debtors, to endorse the Company's name on any checks, notes,
acceptances, money orders, drafts and any other forms of payment or security
that may come into the Agent's possession, to sign the Company's name on any
invoice or ▇▇▇▇ of lading relating to any Receivables, on claims to enforce
collection of any Receivable, on notices to and drafts against customers and
account debtors, on schedules and assignments of Receivables, on notices of
assignment and on public records, to notify the post office authorities to
change the address for delivery of the Company's mail to an address designated
by the Agent, to receive, open and dispose of all mail addressed to the Company
and to do all things necessary to carry out this Agreement. The Company hereby
ratifies and approves all acts of any such attorney and agrees that neither the
Agent nor any such attorney will be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law other than their gross negligence or
willful misconduct. The foregoing power of attorney, being coupled with an
interest, is irrevocable until the Obligations have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Company under the Credit Agreement have terminated. The Agent may
file one or more financing statements disclosing its security interest in any or
all of the Collateral without the Company's signature appearing thereon. The
Company also hereby grants the Agent a power of attorney to execute any such
financing statements, or amendments and supplements to financing statements, on
behalf of the Company without notice thereof to the Company, which power of
attorney is coupled with an interest and is irrevocable until the Obligations
have been fully paid and satisfied and the commitments of the Lenders to extend
credit to or for the account of the Company under the Credit Agreement have
terminated.
Section 9. Defaults and Remedies.
(a) The occurrence of any event or the existence of any condition which
is specified as an "Event of Default" under the Credit Agreement shall
constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default hereunder, the Agent shall have, in addition to all other rights
provided herein or by law, the rights and remedies of a secured party under the
Code (regardless of whether the Code is the law of the jurisdiction where the
rights or remedies are asserted and regardless of whether the Code applies to
the affected Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law, all of which the Company
hereby waives, at any time or times, sell and deliver any or all Collateral held
by or for it at public or private sale, for cash, upon credit or otherwise, at
such prices and upon such terms as the Agent deems advisable, in its sole
discretion. In addition to all other sums due the Agent or any Lender hereunder,
the Company shall pay the Agent and any Lender all costs and expenses incurred
by the Agent or such Lender, including attorneys' fees and court costs, in
obtaining, liquidating or enforcing payment of Collateral or the Obligations or
in the prosecution or defense of any action or proceeding by or against the
Agent, such Lender or the Company concerning any matter arising
-15-
out of or connected with this Agreement or the Collateral or the Obligations,
including, without limitation, any of the foregoing arising in, arising under or
related to a case under the United States Bankruptcy Code (or any successor
statute). Any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Company in accordance
with Section 13(b) hereof at least ten days before the time of sale or other
event giving rise to the requirement of such notice; provided however, no
notification need be given to the Company if the Company has signed, after an
Event of Default hereunder has occurred, a statement renouncing any right to
notification of sale or other intended disposition. The Agent shall not be
obligated to make any sale or other disposition of the Collateral regardless of
notice having been given. The Agent or any Lender may be the purchaser at any
such sale. The Company hereby waives all of its rights of redemption from any
such sale. Subject to the provisions of applicable law, the Agent may postpone
or cause the postponement of the sale of all or any portion of the Collateral by
announcement at the time and place of such sale, and such sale may, without
further notice, be made at the time and place to which the sale was postponed or
the Agent may further postpone such sale by announcement made at such time and
place. The Agent and the Lenders have no obligation to prepare the Collateral
for sale. The Agent and the Lenders may sell or otherwise dispose of the
Collateral without giving any warranties as to the Collateral or any part
thereof, including disclaimers of any warranties of title or the like, and the
Company acknowledges and agrees that the absence of such warranties shall not
render the disposition commercially unreasonable.
(c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default hereunder, the Agent shall have
the right, in addition to all other rights provided herein or by law, to take
physical possession of any and all of the Collateral and anything found therein,
the right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully), and the right to
maintain such possession on the Company's premises (the Company hereby agreeing
to lease such premises without cost or expense to the Agent or its designee if
the Agent so requests) or to remove the Collateral or any part thereof to such
other places as the Agent may desire. Upon the occurrence and during the
continuation of any Event of Default hereunder, the Agent shall have the right
to exercise any and all rights with respect to all Deposit Accounts of the
Company, including, without limitation, the right to direct the disposition of
the funds in each Deposit Account and to collect, withdraw and receive all
amounts due or to become due or payable under each such Deposit Account. Upon
the occurrence and during the continuation of any Event of Default hereunder,
the Company shall, upon the Agent's demand, promptly assemble the Collateral and
make it available to the Agent at a place designated by the Agent. If the Agent
exercises its right to take possession of the Collateral, the Company shall also
at its expense perform any and all other steps requested by the Agent to
preserve and protect the security interest hereby granted in the Collateral,
such as placing and maintaining signs indicating the security interest of the
Agent, appointing overseers for the Collateral and maintaining Collateral
records.
(d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, all rights of the Company to
exercise the voting and/or consensual powers which it is entitled to exercise
pursuant to Section 7(a)(i) hereof and/or to receive and retain the
distributions which it is entitled to receive and retain pursuant to
-16-
Section 7(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon
become vested in the Agent, which, in addition to all other rights provided
herein or by law, shall then be entitled solely and exclusively to exercise all
voting and other consensual powers pertaining to the Investment Property
(including, without limitation, the right to deliver notice of control with
respect to any Investment Property held in a securities account or commodity
account and deliver all entitlement orders with respect thereto) and/or to
receive and retain the distributions which the Company would otherwise have been
authorized to retain pursuant to Section 7(a)(ii) hereof and shall then be
entitled solely and exclusively to exercise any and all rights of conversion,
exchange, or subscription or any other rights, privileges, or options pertaining
to any Investment Property as if the Agent were the absolute owner thereof.
Without limiting the foregoing, the Agent shall have the right to exchange, at
its discretion, any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization, or other readjustment of the
respective issuer thereof or upon the exercise by or on behalf of any such
issuer or the Agent of any right, privilege, or option pertaining to any
Investment Property and, in connection therewith, to deposit and deliver any and
all of the Investment Property with any committee, depositary, transfer agent,
registrar, or other designated agency upon such terms and conditions as the
Agent may determine. In the event the Agent in good faith believes any of the
Collateral constitutes restricted securities within the meaning of any
applicable securities laws, any disposition thereof in compliance with such laws
shall not render the disposition commercially unreasonable.
(e) Without in any way limiting the foregoing, the Company hereby grants
to the Agent and the Lenders a royalty-free irrevocable license and right to use
all of the Company's patents, patent applications, patent licenses, trademarks,
trademark registrations, trademark licenses, trade names, trade styles, and
similar intangibles in connection with any foreclosure or other realization by
the Agent or the Lenders on all or any part of the Collateral. The license and
right granted the Agent and the Lenders hereby shall be without any royalty or
fee or charge whatsoever.
(f) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duty to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral its possession or control if such
Collateral is accorded treatment substantially equivalent to that which the
Agent accords its own property, consisting of similar type assets, it being
understood, however, that the Agent shall have no responsibility for
ascertaining or taking any action with respect to calls, conversions, exchanges,
maturities, tenders, or other matters relating to any such Collateral, whether
or not the Agent has or is deemed to have knowledge of such matters. This
Agreement constitutes an assignment of rights only and not an assignment of any
duties or obligations of the Company in any way related to the Collateral, and
the Agent shall have no duty or obligation to discharge any such duty or
obligation. The Agent shall have no responsibility for taking any necessary
steps to preserve rights against any parties with respect to any Collateral or
initiating any action to protect the Collateral against the possibility of a
decline in market value. Neither the Agent nor any party acting as attorney for
the Agent shall be liable for any acts or omissions or for any error of judgment
or mistake of fact or law other than their gross negligence or willful
misconduct.
-17-
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between the Company and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. Neither the Agent or any Lender, nor any party
acting as attorney for the Agent or any Lender, shall be liable hereunder for
any acts or omissions or for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct. The rights and remedies
of the Agent and the Lenders under this Agreement shall be cumulative and not
exclusive of any other right or remedy which the Agent or the Lenders may have.
For purposes of this Agreement, a Default or Event of Default shall be construed
as continuing after its occurrence until the same is waived in writing by the
Lenders or the Required Lenders, as the case may be, in accordance with the
Credit Agreement or, in the case of a Default, the same is cured by the Company
within any applicable cure period.
Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default hereunder shall, when received by the Agent
in cash or its equivalent, be applied by the Agent as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral, and in protecting, preserving or
enforcing rights under this Agreement or any of the other Loan Documents,
and in any event including all costs and expenses of a character which the
Company has agreed to pay under Section 11.15 of the Credit Agreement
(such funds to be retained by the Agent for its own account unless it has
previously been reimbursed for such costs and expenses by the Lenders, in
which event such amounts shall be remitted to the Lenders to reimburse
them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or other
fees or amounts due under this Agreement or any of the other Loan
Documents other than for principal, pro rata as among the Agent and the
Lenders in accord with the amount of such interest and other fees or
amounts owing each;
(c) third, to the payment of the principal of the Notes and any
liabilities in respect of unpaid drawings under the Letters of Credit, pro
rata as among the Lenders in accord with the then respective unpaid
principal balances of the Notes and the then unpaid liabilities in respect
of unpaid drawings under the Letters of Credit;
(d) fourth, to the Agent, to be held as collateral security for
any undrawn Letters of Credit, until the Agent is holding an amount of
cash equal to the then outstanding amount of all Letters of Credit; and
(e) fifth, to the Agent and the Lenders pro rata in accord with
the amounts of any other Obligations (including, without limitation,
Hedging Liability) owing to them
-18-
and secured hereby unless and until all such Obligations have been fully
paid and satisfied.
The Company shall remain liable to the Agent and the Lenders for any deficiency.
Any surplus remaining after the full payment and satisfaction of the Obligations
shall be returned to the Company or to whomsoever the Agent reasonably
determines is lawfully entitled thereto.
Section 11. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Company under the Credit Agreement have terminated. Upon such
termination of this Agreement, the Agent shall, upon the request and at the
expense of the Company, forthwith release its security interest hereunder.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 10 of the Credit Agreement, all of which
provisions of said Section 10 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the Lenders concerning the
perfection of the security interest granted hereunder or in the value of any of
the Collateral.
Section 13. Miscellaneous.
(a) This Agreement cannot be changed or terminated orally. This
Agreement shall create a continuing security interest in the Collateral and
shall be binding upon the Company, its successors and assigns and shall inure,
together with the rights and remedies of the Agent and the Lenders hereunder, to
the benefit of the Agent, the Lenders, and their successors and assigns;
provided, however, that the Company may not assign its rights or delegate its
duties hereunder without the Agent's prior written consent. Without limiting the
generality of the foregoing, and subject to the provisions of Section 11.12 of
the Credit Agreement, any Lender may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person or entity,
and such other person or entity shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, subject,
however, to the provisions of the Credit Agreement. The Company hereby releases
the Agent and each Lender from any liability for any act or omission relating to
the Collateral or this Agreement, except for the Agent's or such Lender's gross
negligence or willful misconduct.
(b) Except as otherwise specified herein, all notices hereunder shall be
in writing (including, without limitation, notice by telecopy) and shall be
given to the relevant party, and shall be deemed to have been made when given to
the relevant party, in accordance with Section 11.8 of the Credit Agreement.
(c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the enforcement of any other
remedy under or upon this Agreement; it being understood and
-19-
intended that no one or more of the Lenders shall have any right in any manner
whatsoever to affect, disturb or prejudice the lien and security interest of
this Agreement by its or their action or to enforce any right hereunder, and
that all proceedings at law or in equity shall be instituted, had and maintained
by the Agent in the manner herein provided for the benefit of the Lenders.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provisions hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect.
(e) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. All terms which are used in this Agreement which are
defined in the Code shall have the same meanings herein as said terms do in the
Code unless this Agreement shall otherwise specifically provide. The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of any provision hereof.
(f) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same agreement.
(g) Upon the execution and delivery of this Agreement by the Company and
the Agent, on behalf of the Lenders, this Agreement shall supersede all
provisions of the Prior Security Agreement as of such date. The Company hereby
agrees that, notwithstanding the execution and delivery of this Agreement, the
liens and security interests created and provided for under the Prior Security
Agreement continue in effect under and pursuant to the terms of this Agreement
for the benefit of all of the Obligations secured hereby. Nothing herein
contained shall in any manner affect or impair the priority of the liens and
security interests created and provided for by the Prior Security Agreement as
to the indebtedness and obligations which would otherwise be secured thereby
prior to giving effect to this Agreement.
-20-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered as of the date first above written.
INFORMATION RESOURCES, INC.
By
Name________________________________
Title_______________________________
Accepted and agreed to as of the date first above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as
Agent as aforesaid for the Lenders
By
Name________________________________
Title_______________________________
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SCHEDULE A
LOCATIONS
Item 1. Debtor's chief financial office and principal place of business:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Item 2. Additional Places of Business and/or Permitted Collateral Locations:
IRI CORPORATE AND BRANCH ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Chicago (12/1/2000) ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Chicago ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Chicago ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Wood ▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Atlanta ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Suite
Cincinnati ▇▇▇▇▇▇▇▇ Center - ▇▇▇▇▇ #▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Fifth
Fairfield ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇
Fort Washington ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Los Angeles ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ #▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Bentonville ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Minneapolis ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Norwalk ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
San Francisco ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Waltham ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Winston-Salem, N.C. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Toronto ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
B'SCAN MARKETS 1/1/2001
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
#▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
#3 Eau Claire ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
#7 Grand Junction Solarus Square, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
#4 Midland ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
#1 Pittsifeld ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
#1 Visalia ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
B'SCAN STUDIOS ▇/▇/▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇.▇., ▇▇▇▇▇ #▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Eau Claire ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Midland ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Pittsfield ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ #▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
SCHEDULE B
REAL ESTATE LEGAL DESCRIPTIONS
--NONE--
SCHEDULE C
INVESTMENT PROPERTY AND DEPOSITS
A. Investment Property
Cantor ▇▇▇▇▇▇▇▇▇▇ a/c # 350000833 (Information Resources, Inc. security
account)
Account is primarily used to repurchase company stock (ticker symbol
"IRIC")
Current account balance is $0
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a/c # DTM-953409-1 (Information Resources, Inc. security
account)
Account is primarily used to repurchase company stock (ticker symbol
"IRIC")
Current account balance is $0
See attached for listing of current subsidiary and JV interests.
B. Deposits
▇▇▇▇▇▇ Bank a/c # ▇▇▇-▇▇▇-▇ (Information Resources, Inc. depository
account)
▇▇▇▇▇▇ Bank a/c # ▇▇▇-▇▇▇-▇ (Information Resources, Inc. French
Holdings)
▇▇▇▇▇▇ Bank a/c # ▇▇▇-▇▇▇-▇ (Information Resources, Inc. Venezuela
Holdings)
▇▇▇▇▇▇ Bank a/c # ▇▇▇-▇▇▇-▇ (Information Resources, Inc. Hellas SA)
AS OF OCTOBER, 2001
INFORMATION RESOURCES, INC.
LIST OF SUBSIDIARIES AND AFFILIATES
JURISDICTION PERCENTAGE
DOMESTIC OF INCORPORATION OWNERSHIP
-------- ---------------- ---------
IRI Logistics, Inc. (formerly Delaware 100%
LogiCNet, Inc.) *
IRI Puerto Rico, Inc. (formerly Puerto Rico 100%
Market Trends, Inc.)
Mosaic InfoForce, L.P. Delaware 49%
Shoppers Hotline, Inc. Delaware 100%
North Clinton Corporation Illinois 100%
564 ▇▇▇▇▇▇▇▇ Co. #2 Illinois 100%
IRI French Holdings, Inc. *** Delaware 100%
IRI Italy Holdings, Inc. *** Delaware 100%
InfoScan Italy Holdings, Inc. *** Delaware 100%
IRI Venezuela Holdings, Inc. *** Delaware 100%
IRI Guatemala Holdings, Inc. *** Delaware 100%
IRI Greek Holdings, Inc. *** Delaware 100%
* Inactive
*** Holding companies for IRI's interest in foreign companies and joint
ventures
-2-
INFORMATION RESOURCES, INC.
LIST OF SUBSIDIARIES AND AFFILIATES (CONT'D)
FOREIGN (including Joint Venture Subsidiaries)
FOREIGN SUBSIDIARIES
OWNERSHIP JURISDICTION OF INCORPORATION PERCENTAGE
--------- ----------------------------- ----------
Information Resources, S.A * France 100%
IRI Software, Ltd. (formerly Management
Decision Systems, Limited) * United Kingdom 100%
Information Resources, GmbH * Federal Republic of Germany 100% (thru IRI
Software B.V)
Information Resources New Zealand *
Pty Limited New Zealand 100%
Information Resources de Mexico, S.A. de C.V. * Mexico 100%
IRI Hellas S.A. + Greece 100% (thru IRI Greek
Holding)
IRI InfoScan S.r.l. + Italy 100% (80% thru IRI
Italy and 20% thru
InfoScan Italy Hdg)
IRI Software B.V. * Holland 100%
Precis (1136) Limited United Kingdom Approx. 95%
IRI Apollo K.K. * Japan 100%
* Software Sales offices
+ Information business
-3-
INFORMATION RESOURCES, INC.
LIST OF SUBSIDIARIES AND AFFILIATES (CONT'D)
FOREIGN (Cont'd)
FOREIGN JOINT VENTURES
OWNERSHIP JURISDICTION OF INCORPORATION PERCENTAGE
--------- ----------------------------- ----------
IRI-SECODIP, S.C.S + France 92%
IRI InfoScan Limited + United Kingdom Approx. 87%
(formerly InfoScan NMRA) thru Precis 1136
Radar Retail Research + United Kingdom Approx. 35% thru
IRI InfoScan (UK)
IRI/GfK Retail Services GmbH + Federal Republic of Germany Approx. 60% as of
9/00
Information Resources-GfK B.V. +
(formerly IRI/GfK Retail Services B.V
and before that known as GfK InfoScan B.V.) Netherlands 80.1%
Information Resources Espana, S.L. + Spain Approx. 65% as of
9/00
GfK Panelservices Benelux B.V + Netherlands 10%
(formerly AGB ▇▇▇▇▇▇ Hold. B.V. and
now holding co. for the one Belgium and
three Netherland companies below)
Datos Information Resources + Venezuela 49% (thru IRI
Venez. Holdings)
Grupo de Servicios de Informacion S.A. + Guatemala 19.9% (thru IRI
Guat. Holdings w/
option to increase
to 49% over time)
-4-
FOREIGN JOINT VENTURES
OWNERSHIP JURISDICTION OF INCORPORATION PERCENTAGE
--------- ----------------------------- ----------
GfK InfoScan Sverige AB +/++ Sweden 8%
(formerly named GfK Scannerinformation Sverige)
MEMRB International Limited (Cyprus) + Cyprus Approx.
Information Resources Japan, Ltd. + Japan 40% (thru IRI
Apollo KK)
Trigent Software India less than 5%
* Software Sales offices
+ Information business
++ Certain assets of Swedish venture were sold to ▇▇▇▇▇▇▇
-5-
